As many investors will know, metals prices have suffered a fair drop in recent weeks, driven by a strong US dollar, and copper has not been immune to those losses. Though copper usually performs in tandem with the global economy, supply worries and apprehension over demand from China have taken a hit at prices in recent weeks.
The red metal rebounded from a three-month low this past week after the release of positive manufacturing data from China, but finished flat overall.
The 50-point line marks the boundary between growth and contraction, so it should be good for the red metal that China’s economy is growing. However, as Capital Economics’ senior commodities analyst, Caroline Bain, told Reuters, the positive PMI also reduces the prospect of economic stimulus from China, balancing out the positive news. “It is good that the Chinese economy isn’t collapsing, but a weaker PMI (purchasing managers index) number would have raised the likelihood of further stimulus from China, which would have given a boost to copper,” she stated.
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